Employees and Hidden Taxes: Hidden Taxes Discriminate Against Employees

How, you may be asking, could hidden taxes discriminate against employees?  In the next to topic sections, 4.a and 4.b, I will provide a brief answer to that very question.


Employees pay Income Taxes on Gross Earnings.

As an employee, and speaking only of your earnings, the taxes you pay, and the money you use to pay for and support your life and life style (living expenses), here is the way things happen, as required by law.

Your Total Earnings (minus) Payroll Taxes (equals) your Take-Home Pay (for living expenses).

This order requires that you pay taxes on your earnings before you get any of the money.  Business gets a different order, which is where the discrimination I’m talking about comes in to the picture.

Businesses pay Income Taxes on Net Profit.

Businesses generally refers to the money it earns from sales to customers as “Revenue”, rather than wages or earnings.  Business also has “Expenses”, and if all goes well, the amount of revenue will be larger than the expenses, which is what is needed for the business to have a “Net Profit.”

With that much said, the order of events for business, as allowed by law, are as follows.

Revenue (minus) Expenses (equals) Net Profit.  Income Taxes due are based on Net Profit.

So, you, as an employee must pay your estimated taxes out of your total earnings, before you get any of the money to use for your living expenses.  Business gets to deduct all of its business expenses from its total revenue, and then calculate taxes on the net profit.

You also have to hope that those who write and change the tax laws and tax code each year, will be nice and allow you to claim more of your living expenses as deductions on when you file your “Income Tax Return.”  If everything goes well, you will get an “Income Tax Refund.”

Requiring you, as an employee to have all your estimated taxes taken out before you pay your living expenses, doesn’t even sound close to being the same as allowing business to deduct all of their business expenses from their revenue before calculating taxes on the net profits that are left.

And remember, you are not only an employee, you are also a consumer.  As a consumer, you are also paying the hidden taxes of every business you shop at, because the money business collects from its customers is the only source it has to pay any of the taxes required by government.

Thank you for taking time to read and ponder my opinion on this topic.
An Opinion Article by Dave Kemper
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It has been said that: "One definition of insanity is to do the same thing, the same way, over and over and over again, each time expecting to achieve a different result."
Therefore, we must either CHANGE the way we live, or we bind our future to our past as if with CHAINS.
"I do not consider myself to be better than anyone else.  But I do believe in exercising my right to not stay stupid."

David W. Kemper, Author
© Copyright 2014 by David William Kemper.  All right reserved
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